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24 March 2020
ECONOMY

IMF expects global recession as bad as the 2008 global financial crisis

The fund is working closely with other international financial institutions to provide a strong coordinated response and is ready to deploy all of its $1 trillion lending capacity

Kristalina Georgieva, Managing Director of the International Monetary Fund/Bloomberg

by Bloomberg

The International Monetary Fund expects a global recession this year that will be at least as bad as the downturn during the 2008 financial crisis, followed by a recovery in 2021.

Kristalina Georgieva, the IMF Managing Director, said that nearly 80 countries have asked the IMF for emergency finance. Georgieva said the fund strongly supports extraordinary fiscal actions already taken by many countries and welcomes the moves of major central banks to ease monetary policy.

“These bold efforts are not only in the interest of each country but of the global economy as a whole, even more will be needed, especially on the fiscal front,” said Georgieva.

The statement followed the G-20 officials’ conference call to discuss the global economic fallout from the COVID-19 pandemic and work toward a joint response.

Georgieva said that it is paramount to prioritise containment and strengthen health systems to have a rebound next year.

“The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be,” added Georgieva.

The IMF noted that major central banks that have initiated bilateral swap lines with emerging economies may need to provide more. The fund said that it is also exploring a possible proposal that would help facilitate a broader network of swap lines, including through an IMF-swap type facility.


RELATED STORIES: Kristalina Georgieva International Monetary Fund COVID-19

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